Strong On High Relative Volume: Vanguard Natural Resources (VNR)

Trade-Ideas LLC identified Vanguard Natural Resources ( VNR) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Vanguard Natural Resources as such a stock due to the following factors:

  • VNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • VNR has traded 687,317 shares today.
  • VNR is trading at 2.99 times the normal volume for the stock at this time of day.
  • VNR is trading at a new high 11.48% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on VNR:

Vanguard Natural Resources, LLC, through its subsidiaries, acquires and develops oil and natural gas properties in the United States. The stock currently has a dividend yield of 24.7%. Currently there are 2 analysts that rate Vanguard Natural Resources a buy, 2 analysts rate it a sell, and 7 rate it a hold.

The average volume for Vanguard Natural Resources has been 2.5 million shares per day over the past 30 days. Vanguard Natural has a market cap of $186.0 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.06 and a short float of 7% with 2.60 days to cover. Shares are down 53% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vanguard Natural Resources as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 745.4% when compared to the same quarter one year ago, falling from -$60.14 million to -$508.42 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 89.92%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 401.25% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • VANGUARD NATURAL RESOURCES has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, VANGUARD NATURAL RESOURCES swung to a loss, reporting -$20.16 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus -$20.16).
  • VNR, with its decline in revenue, underperformed when compared the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 46.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has increased to $104.77 million or 11.37% when compared to the same quarter last year. In addition, VANGUARD NATURAL RESOURCES has also vastly surpassed the industry average cash flow growth rate of -39.11%.

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